The Supreme Court has rejected Sesa Sterlite's plea seeking removal of ceiling of 25 million metric tonne (MT) and 5 MT imposed on annual production of iron ore from Tumkur and Chitradurga districts, respectively, in Karnataka.

Stating that such unscientific and illogical system of capping on iron ore production in the state has created adverse socio-economic implications, the Anil Agarwal company said that steel mills and sponge iron units have been suffering due to shortage of the raw material.

Iron ore production from Karnataka has declined from 43 MT in FY 2010 to 13 MT in FY 2012, it said, adding that production in FY 2014 will be only 15-18 MT.

A special forest bench headed by Justice AK Patnaik, however, dismissed as withdrawn the Sesa Sterlite's plea challenging the validity of the apex court's direction in April last year imposing district-wise cap on the annual production of iron ore mines in Karnataka.

Based on the recommendation of the CEC, the court last year had allowed resumption of mining subject to certain conditions including a ceiling on the annual production of iron ore.

By virtue of the cap, Sesa Sterlite was allowed to extract only 2.29 MMT from its Chitradurga district.